Meaning of Under Developed Economy
Meaning of under developed economy
It is not simple to characterize an under-developed economy. As per the United Nations experts, as under-developed nation is one in which per capita real Income is little when matched up to with the per capita real incomes of Australia, Canada, the USA and Western Europe.
This classification, although it spotlights consideration on an extremely significant feature of under-development, viz., deficiency, can by no means be measured sufficient. A nation may be poor and nevertheless not under-developed in relation to its reserves, if the assets turn out to be insufficient or insufficient; it might have fully urbanized its reserves and yet be amongst the poorest nations in the earth.
As per Professor Ragnar Nurkse, 'under-developed' nations are those which evaluated with the progressed nations are under-prepared with resources in relation to their inhabitants and normal reserves.
But this also is not a completely acceptable definition. As Professor Ragnar himself spots out, financial growth has much to do with human donations, social approaches, political situations and chronological misfortunes. Capital is an essential but not an adequate situation of development.
The Indian Planning Commission describes an under-developed nation as one "Which is differentiated by the co-survival, in better or less amount, of under-utilized or unutilized man-power, on the one hand, and of fallow normal reserves on the other".
The survival of inactive reserves, as frazzled by this definition, is undeniably a significant feature of an under-developed nation. But there is a problem in it. It does not undoubtedly point out the reasons of the survival of inactive reserves. Reserves can be and are very often inactive yet in the extremely urbanized capitalist nations, chiefly in periods of despair. But such nations can’t be grouped as ‘under-developed’ on that ground.
A country is stated as under-developed (a) if its per capita revenue is squatty, (b) if its individual and natural sources are under-used or remain inactive; (c) if it is feasible to increase its point of per capita income and national income completely or appropriately developing its manpower and natural resources.